2163rd Council meeting INTERNAL MARKET. Brussels, 25 February 1999

Transcription

1 C/99/55 Brussels, 25 February /99 (Presse 55) 2163rd Council meeting INTERNAL MARKET Brussels, 25 February 1999 President:Mr Lorenz SCHOMERUS State Secretary, Ministry of Economic Affairs and Technology of the Federal Republic of Germany

2 LIST OF CONTENTS PARTICIPANTS... 3 POINTS DISCUSSED FOLLOW-UP TO THE SINGLE MARKET ACTION PLAN and SIMPLER LEGISLATION FOR THE INTERNAL MARKET (SLIM) / BETTER REGULATION... 4 CARDIFF ECONOMIC REFORM PROCESS - INTERNAL MARKET ASPECTS - Council conclusions... 6 ARTISTS' RESALE RIGHT PARALLEL IMPORTS / EXHAUSTION OF TRADE MARK RIGHTS PATENTS - COMMISSION COMMUNICATION GREEN PAPER ON COMBATING COUNTERFEITING AND PIRACY PROVISION OF CROSS-BORDER SERVICES IN THE EU BY THIRD-COUNTRY NATIONALS OTHER BUSINESS Proposal for a Regulation on the Community design For more information: Tel

3 The Governments of the Member States and the European Commission were represented as follows: Belgium: Mr Jean-Louis SIX Deputy Permanent Representative Denmark: Mr Jørgen ROSTED State Secretary for Industry Germany: Mr Lorenz SCHOMERUS State Secretary, Federal Ministry of Economic Affairs and Technology Greece: Mr Adamantios VASSILAKIS Deputy Permanent Representative Spain: Mr Ramón de MIGUEL y EGEA State Secretary for Foreign Policy and the European Union France: Mr Philippe ETIENNE Deputy Permanent Representative Ireland: Mr Tom KITT Minister of State at the Department of Enterprise, Trade and Employment, with special responsibility for Labour Affairs, Consumer Rights and International Trade Italy: Mr Enrico LETTA Minister for European Affairs Luxembourg: Ms Lydie ERR State Secretary for Foreign Affairs, External Trade and Cooperation Netherlands: Mr Dick BENSCHOP Mr Gerrit YBEMA State Secretary for Foreign Affairs State Secretary for Economic Affairs Austria: Mr Johann FARNLEITNER Federal Minister for Economic Affairs Portugal: Mr Francisco SEIXAS da COSTA State Secretary for European Affairs Finland: Mr Jan STORE Deputy Permanent Representative Sweden: Mr Leif PAGROTSKY Minister of Trade, Ministry for Foreign Affairs United Kingdom: Lord SIMON of Highbury Minister for Competitiveness and Trade in Europe Commission: * * * Mr Mario MONTI Member

4 FOLLOW-UP TO THE SINGLE MARKET ACTION PLAN and SIMPLER LEGISLATION FOR THE INTERNAL MARKET (SLIM) / BETTER REGULATION The Council held an open debate, transmitted by video-link to the press room, on the follow-up to the Single Market Action Plan as well as legislative simplification including the SLIM initiative. Regarding the Action Plan, Commissioner MONTI's first evaluation was that by and large it has been implemented successfully. The internal market is now well established and underpins the Community's policies in a wide range of sectors. While efforts so far had been concentrated on completing the internal market, future efforts should focus on making it increasingly operational. The Commission, therefore, saw no need for another action plan but would rather advocate the fixing of strategic objectives and their periodic review. The Single Market Scoreboard, which will continue to be published in six-monthly intervals, would remain an important instrument for monitoring the functioning of the internal market and identifying problems. Finally, Mr MONTI announced that the Commission will submit, in time for the next Internal Market Council in June 1999, a communication evaluating the Action Plan together with its ideas as to the Single Market objectives to be achieved over the next few years. A number of delegations stressed that one of the main objectives now should be to ensure the effective implementation and enforcement of Single Market legislation. The Commissioner's suggestion to fix medium-term objectives for the further efforts to improve the functioning of the internal market received widespread backing in the debate. Many delegations considered that the internal market has not yet delivered all the promised results for Europe's citizens. A view strongly held by several Ministers therefore was that strategic objectives leading to tangible improvements for both business and citizens need to be defined. Many Ministers indicated specific issues or sectors which they consider to be a priority in order to attain a better-working internal market: The proposals relating to a European Company Statute and to electronic commerce were repeatedly quoted, as were public procurement, mutual recognition and closer co-ordination on taxation matters. On the SLIM initiative, Mr MONTI recalled that up to now 14 sectors have been subject to a specific evaluation with a view to improving and/or simplifying Community legislation. Commission proposals would soon be forthcoming, following the recommendations of the SLIM (phase 3) teams concerning Community insurance legislation and the electro-magnetic compatibility Directive. A proposal to simplify the Social security coordination rules is already before the Council. As for SLIM 4, the experts' recommendations (dealing with company law, pre-packaging legislation and dangerous substances) are expected in May, according to Mr MONTI who also suggested a broad stocktaking of the SLIM initiative as a whole once the fourth phase has been concluded. A great majority of Ministers drew attention to the delays in achieving tangible results from the recommendations made by the SLIM teams and underlined the need to accelerate this work. There was general agreement with the Commissioner's suggestion for a broad stocktaking. Many speakers also expressed their interest in a pursuit of the SLIM initiative, some of them putting forward potential subject matters for a fifth phase.

5 Winding up the debate, Council President SCHOMERUS noted consensus on a commitment to address new challenges and set fresh goals in order to further improve the functioning of the internal market and make it fit for the new environment of increased transparency and competitive pressure arising from the introduction of the euro. Credibility should be a guiding principle: it was important to set objectives on which the Community could deliver concrete results. This question of credibility should also be taken into consideration with regard to SLIM: the effects of simplification should be tangible for business and citizens alike. The Council President saw agreement from all delegations on the need to make future work more interactive: the decision-makers should both put greater emphasis on informing citizens and economic operators of the potential benefits from the single market and take account of feedback from them as to their concerns and expectations. It is recalled that the Single Market Action Plan was presented by the Commission in June 1997; it set out a list of actions to be undertaken before January 1999 in four main areas: - making the rules more effective; - dealing with key market distortions; - attacking sectoral obstacles to market integration; - delivering a Single Market for the benefit of all citizens. The SLIM (Simpler legislation for the internal market) initiative which was launched in 1996, works in the following way: Small groups of experts and users meet in an informal framework to look at a particular legislation (one or more legal texts concerning a particular subject). Within a few months, these groups identify existing problems and make recommendations to the Commission on how to simplify and improve the legislation. In order for these recommendations to translate into actual simplification, the Commission has to make a formal proposal to the legislative authority (the Council, in some cases jointly with the European Parliament) which then considers it in accordance with the normal legislative procedures. CARDIFF ECONOMIC REFORM PROCESS - INTERNAL MARKET ASPECTS The Council held an extensive debate on the internal market aspects of the Economic Reform Process launched by the European Council in Cardiff in June It recalled that the European Council had agreed that the increased transparency and competitive pressures resulting from EMU make it necessary for markets (goods, services and capital) to function better and that structural reforms were necessary in this context. The European Council had welcomed the procedure decided upon by the ECOFIN Council whereby Member States and the Commission would produce year-end reports on products (goods and services) and capital markets in the context of the annual elaboration of Broad Economic Policy Guidelines. The Internal Market Council, on 7 December 1998, had agreed to make an input from an internal market perspective into the consideration of these Guidelines by the ECOFIN Ministers; the Vienna European Council welcomed such a contribution. Since then, the first series of national reports as well as the Commission's "Cardiff 1"-report ("Economic reform: Report on the functioning of Community Product and Capital Markets") have been examined, resulting in suggestions for further action in eight horizontal areas: The legal and administrative framework; competition and state aids; parallel trade; technical barriers to trade; public utilities; public procurement; services; and SMEs.

6 Based on this examination, the "Internal Market" Council unanimously agreed the following Conclusions which represent its contribution to the elaboration of the 1999 Broad Economic Policy Guidelines: "The Council, whereas with the introduction of the Single Currency the internal market has taken on a new dimension as the nucleus of European economic integration; whereas, as stated in the Conclusions from the Cardiff European Council, the full benefits of the Economic and Monetary Union and the Single Market for all citizens can only be achieved by a strategy to promote employment through increased competitiveness and economic and social cohesion within a framework of macro-economic stability; whereas increased price transparency and competition created by economic and monetary union mean that still existing structural deficiencies stand out more clearly; whereas this calls for a regular in-depth analysis of developments in product and capital markets so that such shortcomings can be dealt with more effectively; whereas in doing so, the compatibility of internal market measures with all other relevant policy areas, in particular economic and social balance, must be taken into account; whereas to this end, the Cardiff and Vienna European Councils initiated a process for an effective coordination of Member States' economic policies; whereas as part of such a strategy, the Council has made a first analysis of the reports of the Member States and the Commission on the functioning of product and capital markets from the point of view of the Single Market; whereas this analysis, drawing on the work by the Commission and the Member States as referred to in the Presidency's note of 3 February 1999 (5745/99 MI 11), stresses the importance of microeconomic aspects in the elaboration of the Broad Economic Policy Guidelines; whereas such analysis will be part of a continuing process; HAS REACHED THE FOLLOWING CONCLUSIONS: 1. The reports submitted by the Member States and the Commission on the functioning of product and capital markets confirm that considerable progress has been achieved in developing the internal market through the dismantling of barriers to trade and by opening up national markets for increased competition, as evidenced by a significant increase in intra-eu trade, trade diversification, as well as by a noticeable degree of price convergence. This positive development is not least the result of the Action Plan for the Single Market and the clear political commitment by the Member States and the Commission to achieve its objectives and, in particular, to speed up the implementation of internal market legislation and improve its enforcement. 2. Nevertheless, trade barriers and structural deficiencies remain, hampering market integration and efficiency, preventing citizens and enterprises from enjoying the full benefits of the internal market. Decisive action is therefore called for - at national as well as Community level - in order to eliminate remaining barriers and to monitor carefully the structural developments and economic performance of markets.

7 Only by optimizing the functioning of the internal market can macro-economic policies develop their full potential for improved competitiveness and productivity, macro-economic stability, sustainable growth and higher employment and thus achieve balanced economic development. Necessary structural adjustments have to be speeded up. In this latter context, social acceptability as well as relevant Community policies, such as economic and social cohesion and the protection of consumers and of the environment, should be taken into account. 3. Against this background the Council has identified the following areas where there is need for further action, at national and EU-level: = A higher quality regulatory environment - Member States reaffirm their commitment to a complete transposition of Community legislation without any further delay, in particular through a better implementation of national transposition timetables as already agreed. Full administrative implementation and efficient enforcement of internal market rules are equally essential. - Continued efforts are required, at national as well as at Community level, to simplify and improve the legal and administrative framework. Less complicated and more userfriendly rules will reduce the administrative burden and costs for business, not least small and medium-sized enterprises, thereby creating more favourable conditions for entrepreneurship and employment. Initiatives at Community level such as SLIM, BEST and Business Test Panels, as well as national simplification/better regulation efforts, all play an important role in this respect and should be pursued with a view to arriving at a more systematic and coherent approach to regulatory reform throughout the European Union, which would be beneficial to all economic actors. The promotion of a legislative and administrative framework conducive to enhanced market efficiency should reinforce the positive achievements of the Community acquis. = An improved competitive environment - A correct and consistent application of Community as well as national rules in the field of competition policy is essential. The Commission's monitoring function is crucial but the Member States too must take steps to strengthen their policies where necessary. - An in-depth examination at Community level of the effects of State aids on competition and the functioning of markets is needed in order to prevent unwarranted distortions within an improved internal market and the new economic conditions. In order to increase economic efficiency in the Community, continued efforts are required to reduce the overall level of State aids which constitute distortions of competition and to redirect them towards transparent measures pursuing objectives, such as employment, which are in the common interest. The Commission's role in monitoring and assessing State aids is essential, in particular in relation to measures most likely to distort competition. The Council will, on a regular basis, review progress achieved by Member States in these regards. - The Council recognizes the importance to the effectiveness of the European economy of an efficient and competitive internal market for utilities, which takes due account of public service obligations. The Council underlines the necessity for Member States fully to apply and enforce the directives which aim to introduce increased competition in certain sectors in order to improve the functioning of the internal market. Sectors where liberalisation is most advanced, such as telecommunications and parts of the transport sector, are already beginning to deliver tangible benefits, to varying degrees, for economic actors.

8 Member States are encouraged to take advantage of the possibilities offered by the imminent opening of energy markets to increased competition. Continued efforts are equally needed at national as well as Community level to ensure that other markets are also progressively opened up to competition in all Member States, while account is taken of the specific characteristics of each of the sectors concerned, including any relevant geographical factors. To this end, the Council will continue to pay particular attention to issues such as completion of and access to networks, especially interconnections and cross-border links, and the role of regulatory bodies. The Council invites the Commission to pay particular attention in future reports to the impact, in particular on growth and employment, of opening up markets in these sectors, so that both services of general economic interest are ensured and barriers to the operation of the single market or to the application of competition rules are avoided. - The Council recalls its Conclusions of 18 May 1998 on public procurement and again emphasises the importance of full and timely implementation as well as correct application of the directives in this area and any appropriate accompanying measures, in all Member States. The Council calls upon the Commission to submit its forthcoming proposals on this subject as soon as possible. The Council will start giving active and urgent consideration to them in Spring 1999 with a view to ensuring the full benefits of increased competition also in relation to Member States' budgets. - Purposeful continuation of work to resolve issues arising in connection with limitations on parallel trade is called for. The Council will also examine the results of the Commission's study on the exhaustion of intellectual property rights, with a view to seeking the correct relationship between the interests of rightholders and those of consumers. = Elimination of remaining barriers to trade - In addition to harmonization and approximation of legislation, effective application of the principle of mutual recognition is crucial for the removal of technical barriers to trade. Public and private institutions - as well as entities responsible for homologation, approval, certification and testing procedures -must cooperate in order to improve the enforcement of mutual recognition. The Council awaits with great interest the Commission's forthcoming Communication on this subject, to which it will give active and urgent consideration with a view to improving the functioning of the goods and services markets. - In order to enhance the production of European standards and to increase the efficiency of instruments aimed at tackling remaining technical barriers to trade, work should be intensified in the competent public and private - national and European - bodies, as well as in the Commission and in Member States. = Improved performance of the services sector - In order to enable full use to be made of the advantages and the economic potential of the Single Market in the services sector, additional efforts are required, particularly the complete and timely application by the Member States of Community law in this field. The persistent fragmentation of services markets in the EU has to be overcome, consumer confidence increased and cross-border provision of services facilitated. The Council sees particular importance in the development of a legal framework for electronic commerce which takes account of all interests and will pursue this aim with vigour. - The Council points out that the capacity of the internal market to function optimally is determined to a large extent by the availability of appropriate and efficient financial services, including risk capital, for all economic operators, and in particular for SMEs.

9 = Due consideration needs to be given to national tax systems and their effects on the functioning of the internal market, in particular the continuing need for coordinated action at European level to tackle harmful tax competition in order to help reduce distortions in the internal market. = Although considerations of the situation of small and medium-sized enterprises and the importance of a well-functioning internal market for them form an integral part of the analysis of all subjects addressed in these Conclusions, the Council stresses the importance of improving the business environment for SMEs as the focus for a consistent growth and employment strategy. This must include, inter alia, a strengthening of their innovative capacity, including access to knowledge. 4. In the light of experience gained from the Cardiff process so far, the Council requests the Permanent Representatives Committee to examine how procedures for the preparation and consideration of future national and Commission reports can be improved. It draws particular attention to the need for a more homogeneous structure for the national reports, a timetable for their examination which facilitates the deliberations in the Council as well as enhanced cooperation in the collection of statistical and other data to support the process of monitoring the functioning and performance of markets. 5. The Internal Market Council will consider, on the basis of these Conclusions and the suggestions to be put forward by the Commission, how to develop work in the internal market area following the expiry of the Action Plan for the Single Market, giving priority to initiatives designed to improve market integration and efficiency in order to enable citizens and enterprises to enjoy the full benefits of the internal market. 6. In order to monitor progress in achieving a fully integrated internal market, including in the areas addressed above, the Council calls on the Commission to develop further its monitoring instruments and procedures, building in particular on experience gained so far from the Single Market Scoreboard. 7. In fulfilment of the mandate of the Vienna European Council, the Internal Market Council agrees that these Conclusions will form its contribution to the elaboration of the Broad Economic Policy Guidelines." ARTISTS' RESALE RIGHT The Council discussed the proposal for a directive on the resale right for the benefit of the author of an original work of art. The Presidency noted that there was already a broad consensus in favour of the proposal. However, in view of the continuing difficulties of some Member States, it also noted that there were some remaining issues requiring further examination. The Council therefore asked the Permanent Representatives Committee to take forward this work with the aim of reaching early agreement. The resale right is a right for the author or his heirs to receive a royalty based on the sale price obtained for any resale of the work subsequent to its first transfer by the author.

10 The reasoning behind the proposal is that while most Member States' legislation does contain the artist's resale right, the existing laws display certain differences, notably as regards the categories of works concerned, those entitled to receive royalties, the rate applied, the transactions subject to payment of a royalty, and the basis on which these are calculated. It is clear that the application or non-application of such a right is a factor which contributes to the creation of distortions of competition as well as displacements of sales within the Community; the disparities with regard to the application of the right have a direct negative impact on the proper functioning of the internal market in works of art. Four Member States (Austria, Ireland, the Netherlands and the United Kingdom) have no resale right; Luxembourg makes provision for it in its law but has not yet adopted implementing measures to put it into effect. PARALLEL IMPORTS / EXHAUSTION OF TRADE MARK RIGHTS The Council took note of the oral report by Commissioner MONTI on the results of the study on the exhaustion of trade mark rights and of the Commission's intention to consult the Member States and to organise a hearing of all interested parties on this subject. After a broad exchange of views the Council asked the Permanent Representatives Committee to examine the results of the study as soon as the Commission's full report on it is available so as to enable an in-depth debate on this subject to take place at the Internal Market Council in June PATENTS - COMMISSION COMMUNICATION Commissioner MONTI introduced to the Council the recently adopted Communication on the follow-up to the 1997 Green Paper on patents. In this communication, the Commission gives a detailed assessment of the consultation on the Green Paper and announces its new approach to improve the framework for obtaining patent protection in the EU. GREEN PAPER ON COMBATING COUNTERFEITING AND PIRACY The Council also took note of the presentation by Mr MONTI of this Green Paper, which the Commission adopted last October. With its publication four months ago, the Commission started a wide-ranging consultation process of all interested parties and institutions. Due to be completed by March, this consultation aims to determine the economic impact of counterfeiting and product piracy in the Single Market, to assess the effectiveness of the relevant legislation andtocomeupwithanumberofinitiativestoimprovethesituation. Some delegations and the Commission pointed to the importance of making progress on this subject given the implications for the question of the exhaustion of trade mark rights which concerns parallel imports of authentic branded goods. PROVISION OF CROSS-BORDER SERVICES IN THE EU BY THIRD-COUNTRY NATIONALS Commissioner MONTI presented two proposals for directives aimed at facilitating the free provision of services within the Community and at clarifying the legal situation of third-country nationals providing such cross-border services.

11 The proposals concern non-eu nationals working in a Member State, be it as independents or as employees who wish to offer their services in another Member State than the one of residence, or are posted to another EU country on a temporary basis by their employer. The proposals provide for the introduction of a "EC service provision card" which would vouch for the legal situation of these persons. In the case of independents, the card would also dispense them from having to register as self-employed in other member States. OTHER BUSINESS Proposal for a Regulation on the Community design At the request of the Spanish delegation, the Commission indicated that it expected the amended proposal for a Regulation on Community designs to be adopted by the Commission at the end of April or early in May The Commission is amending its original proposal submitted at the end of 1993 to take account of the final version of the Design Directive adopted in October Once the Regulation is adopted, the Community design will be administered by the Office for Harmonisation in the Internal Market (Trade Marks and Designs) which is situated in Alicante.